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New research from The Female Investor identified five affordable locations across Australia that offer growth prospects for those who are considering to rentvest.
The Female Investor co-author Kate Hill said rentvesting is a viable option for many first-home buyers who would like to enter the market without compromising their ideal location to live in.
“Renting continues to be more affordable than purchasing in desirable pockets of major cities, where buy-in prices can easily be millions of dollars and where many young people desire to live,” she said.
“However, being a long-term renter without putting your money to work somehow has significant ramifications on your financial future as well as potentially causing hardship in retirement.”
The Female Investor co-author and Property Investment Professionals of Australia member Nicola McDougall said despite the price gains over the past year, many Australians are actually encouraged to participate in the property market through rentvesting, as many locations remained affordable.
“As well as many young people moving to more affordable areas over recent years, rentvesting has become a popular strategy for those who want to buy property but still want to remain living in an expensive real estate city such as Sydney or Melbourne,” she said.
Here are five of the best locations across Australia for Australians considering to rentvest:
Casey City Council (Melbourne)
Suburb: Cranbourne — $657,000
Rental Vacancy Rate: 1%
Ms Hill said one of the factors making Casey City Council a viable location to invest in is solid economic fundamentals.
“Local industries are diverse, which means the area is not dependent on only one industry hence the area is less volatile which keeps employment rates very stable.”
Casey City Council’s population growth rate outpaced other rapidly growing outer Melbourne municipalities.
“In fact, it’s growing at a rate more than twice the national average,” Ms Hill said.
City of Onkaparinga (Adelaide)
Suburb: Morphett Vale – $430,000
Rental vacancy rate: 0.1%
The City of Onkaparinga is considered an attractive seaside location, thanks to its lifestyle, affordability, improved transport links, economic growth drivers, population growth, and proximity to major jobs nodes.
“For example, $1bn has recently been spent on infrastructure, including the duplication of the Southern Expressway, the McLaren Vale overpass and the electrification and extension of the Noarlunga rail network to Seaford,” Ms Hill said
Ms Hill said it has a track record of steady price growth and above-average rental yields, making it one of South Australia’s strongest population areas.
“Over the next 20 years, the region is expected to receive an influx of 48,000 additional residents,” she said.
Penrith City Council (Sydney)
Suburb: Kingswood – $790,000
Rental vacancy rate: 1%
Situated in Western Sydney, Penrith City Council benefits from the region’s economy and is expected to create 12,000 jobs by 2036.
“In the past two years, Penrith’s property market received a ‘ripple effect’ from the growth in Sydney, with most suburbs experiencing double-digit annual growth in median prices in recent years,” Ms Hill said.
Penrith City Council is ideal for rentvestors or homebuyers with slightly higher budgets.
“Penrith has a robust major infrastructure program, recorded population growth every year for decades, has diverse industries that keep its economy vibrant, as well as a more affordable property market that is incredibly active for both renters and buyers,” Ms Hill said.
Suburb: Mirrabooka – $385,000
Rental vacancy rate: 0.4%
City of Stirling is one of the four precincts that helped boost Perth’s market recovery two years ago.
Home to the Scarborough Beach, the City of Stirling’s seaside lifestyle makes it attractive to young buyers and renters.
“Further adding to the region’s appeal are the shopping and education facilities, coupled with good transport links to the Perth CBD,” Ms McDougall said.
Given that the City of Stirling is the largest local government area in Perth, it is projected to continue to see infrastructure improvements, which would benefit its suburbs.
Moreton Bay Regional Council (Brisbane)
Suburb: Caboolture – $445,000
Rental vacancy rate: 0.7%
Ms McDougall said Moreton Bay region ticks many investments fundamental boxes for property investors.
“A few years ago, Moreton Bay was classified as a priority growth area by the state government, with its population predicted to hit half a million within about two decades,” she said.
“One of the many major projects that is earmarked for the region is the development of Caboolture West, which is a growth precinct that boasts a plethora of attributes as well as affordable property.”
Furthermore, Caboolture West is identified as a major expansion area within the South East Queensland Regional Plan.
Situated at the heart of a rapidly growing corridor north of Brisbane, Caboolture West is slated to eventually provide about 30,000 homes for around 70,000, generating nearly 3,000 jobs.
Gerv Tacadena, Your Investment Property, 31 January 2022